The promise of billion-dollar exits and splashy stock offerings have long lured tech entrepreneurs to the southern San Francisco Bay area and prompted other metropolitan areas to try to create their own innovation-based sectors.

Tech City in east London, England, is one such example and some Canadian startups looking to tap into larger markets are bypassing the original Valley and instead heading east across the Atlantic.

Hossein Rahnama, founder and chief executive of Flybits based out of Ryerson University’s Digital Media Zone (DMZ) in Toronto, said he decided to set up a second office in London because it was similar to the company’s home city in many ways.

“The section we’ve chosen — Tech City — is a tech cluster. That’s the model that we are also trying to build here as part of the DMZ,” he said, noting that both Canada and the United Kingdom offer a lot of government support in the form of tax credits and grants.

“Usually Canadian startups as their next expansion point immediately go to Silicon Valley,” Mr. Hossein said. “The challenge is they’re going to a market that’s extremely competitive and going there as a startup may not be the wisest.”

Europe tends to have higher adoption rates of new mobile technologies, which made London an appealing place to launch an expansion of his mobile software platform, he said.

The city offers the obvious advantage of doing business in English in close proximity to European and Asian markets. Plus, he said, nearby colleges produce promising talent and there is also good access to capital.

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Tech City didn’t materialize entirely by accident: It had some help from government department U.K. Trade and Investment (UKTI) through the Tech City Investment Organization.

Trevor Novak, director of investment for UKTI in Canada, said the cluster, which developed around a fledgling tech community in an area formerly dubbed Silicon Roundabout, grew organically, although the agency did “seed it with money.”

As of December, it claimed 774 tech and digital creative businesses and the area is home to startups, multinationals such as Cisco Systems Inc. and Google Inc., a network of incubators and venture capital investors including Accel Partners and Index Ventures.

Mr. Novak works with Canadian companies to help them sort out the details of setting up shop in the United Kingdom including getting incorporated, finding office space, applying for research and development tax credits and linking up with universities to recruit workers.

“This year alone we’ve probably worked with 50 Canadian companies,” he said, and several have established offices in Tech City.

“We’re not into stealing companies,” he said. “We look for companies that are looking to enter other markets and expand.”

Flybits, which grew out of a research group Mr. Rahnama headed at Ryerson, was offi-cially incorporated last November and is looking to add to its 15 Toronto employees with two business developers and one engineer in London.

Meanwhile, Vancouver entrepreneur Arnold Leung said his five-year-old company, Appnovation Technologies, will add a third office (it has a second location in Atlanta) in Britain, including sales and research and development.

Mr. Leung said a central part of the decision to set up in London was to expand the company’s existing relationship with partners such as Acquia Inc. and Alfresco Software Inc., both of which have major operations in the United Kingdom.

Those partners provide the software that Appnovation customizes to build applications, websites and corporate Internet systems for its clients.

So far the company, which has about 55 employees, has done most of its development work in Vancouver, but with the significant difference in time zones between Canada’s west coast and London, he said the company will need developers on site in London as well.

“We’re moving to the U.K. because there’s a strong demand for websites,” he said. “There’s a massive gap, especially on the app development side.”

Fellow Vancouver startup HootSuite Media Inc., which has attracted more than $2-million in venture capital funding and grown to more than 160 employees since it was founded in 2008, is also in the process of setting up an office in London, likely in the Tech City area.

Ryan Holmes, HootSuite’s chief executive, said it offers a “great toehold into Europe” for the company’s social media management platform and he’s looking at “building out a sales force there.”

The location will start with about six employees in sales, support and account management, he said, with plans to grow to about 20 by the beginning of next year.

“We have good coverage in North America; our big concern was looking at Europe and the rest of the world,” Mr. Holmes said. “We do have representation in major American cities but we needed more European coverage and it’s a high-growth area for our company.

“I think we’re seeing a big decentralization of technology out of San Francisco and I think we’re seeing globally tech hubs start up in every city that’s cosmopolitan and has talent.”